Amazon, Google and Facebook have the power to move entire economies

The world of data has its own economics. If you know one thing about one person, you don’t have much. If you know one thing about nearly everyone or nearly everything about one person, you have a little. But if you know nearly everything about nearly everyone, you’ve got something priceless. Essentially, data giants are middlemen who connect buyers with sellers for a fee. Google, for example, takes a place among the premier content providers in the world. Every day, the company handles millions of searches for its users. But mainly, it creates lots and lots of lists. Google became what it is because its lists are very useful to millions of users. But in nearly every case, what a user wants is not provided by Google itself. Google just connects what the user wants with a list of relevant web pages. Google’s famous web crawlers search the Internet, making lists and rendering those lists to users.All companies face growing competition online, where a local business is no nearer than a competitor on the other side of the world: just one click away. When ordinary companies add more computing power, it’s a necessary expense, something required to make and sell their offerings. But for the data giants, each new data center is an end in itself and a competitive weapon. Traditional companies accumulate information about a narrow range of activity. Companies record who their customers are, where they are located, what and how much they buy, and the prices they pay. In the past, companies ascertained rudimentary facts about their customers by observing, by asking questions, and by using data brokers. But they lacked the data, the access, and the analytical resources to assemble a granular picture of customers.

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